Modern Monetary Theory (MMT): A General Introduction

CASS Working Papers on Economics & National Affairs, Working Paper ID: EC017UC (2020)

21 Pages Posted: 8 Apr 2020 Last revised: 9 Apr 2020

See all articles by Usman W. Chohan

Usman W. Chohan

UNSW Business School; Critical Blockchain Research Initiative (CBRI); International Association of Hyperpolyglots (HYPIA); Centre for Aerospace & Security Studies (CASS)

Date Written: April 6, 2020

Abstract

Modern Monetary Theory (MMT) is a heterodox macroeconomic lens that recontextualizes the role of monetary and fiscal policy in sovereign governments that borrow and issue national debt in their own monetary instrument. It MMT thus describes the practical uses of fiat currency in a public monopoly on money by a government with currency-sovereignty. MMT has gained increasing “currency” in recent years as progressive political parties discuss the “costs” involved in ambitious projects to develop their societies; but has gained an even larger audience since the spread of the Covid19 pandemic, with massive liquidity being pumped into monetary systems of the First World to grapple with the global health crisis. MMT’s interesting outlook on inflation, interest rates, government spending, deficits, and debt require the careful attention of a wider public. As such, this working paper offers a simple and general introduction to MMT.

Keywords: MMT, banking, monetary, deficit, debt, macroeconomics, taxation, money supply, interest rates

Suggested Citation

Chohan, Usman W., Modern Monetary Theory (MMT): A General Introduction (April 6, 2020). CASS Working Papers on Economics & National Affairs, Working Paper ID: EC017UC (2020), Available at SSRN: https://ssrn.com/abstract=3569416 or http://dx.doi.org/10.2139/ssrn.3569416

Usman W. Chohan (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Critical Blockchain Research Initiative (CBRI) ( email )

International Association of Hyperpolyglots (HYPIA) ( email )

HYPIA
www.polyglotassociation.org
Montreal, Quebec
Canada

Centre for Aerospace & Security Studies (CASS) ( email )

Islamabad
Pakistan

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